Ex-10.29



 










Exhibit 10.29




LIMITED WAIVER AND SECOND AMENDMENT TO

FOURTH AMENDED AND RESTATED CREDIT AGREEMENT



This Limited Wavier and Second Amendment to Fourth Amended and Restated Credit
Agreement (this “Agreement”) is entered into this 24th day of November, 2004
among PORTOLA PACKAGING, INC., a Delaware corporation, as Borrower, and GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation (“GECC”), for itself, as
Agent, Issuing Lender and Lender.




W I T N E S S E T H:



WHEREAS, Borrower and GECC, as Agent, Issuing Lender and Lender, are parties to
that certain Fourth Amended and Restated Credit Agreement dated as of January
16, 2004 (as amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”);



WHEREAS, the Events of Default listed on Exhibit A hereto (the “Specified
Defaults”) have occurred and are continuing under the Credit Agreement; and

WHEREAS, Agent has agreed to waive the Specified Defaults, and the parties have
agreed to amend the Credit Agreement, in each case upon the terms and
conditions set forth herein.



NOW THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein and in the Credit Agreement, the parties agree as
follows:




     Definitions. Capitalized terms used herein without definition and defined
in the Credit Agreement are used herein as defined therein.



     Limited Waiver. Subject to the satisfaction of the conditions precedent
set forth in Section 4 hereof, Agent and Lenders hereby waive the Specified
Defaults; provided that such waiver shall be limited precisely as written and
shall not be deemed or otherwise construed to constitute a waiver of any other
Default or Event of Default or to prejudice any right, power or remedy which
Agent and Lenders may now have or may have in the future under or in connection
with the Credit Agreement or any other Loan Document (after giving effect to
this Agreement), all of which rights, powers and remedies are hereby expressly
reserved by Agent and Lenders.



     Amendments to Credit Agreement. Subject to the satisfaction of the terms
and conditions set forth herein, the amendments to the Credit Agreement set
forth in this Section 3 shall become effective as of the date hereof.



     Section 3.3(I) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:




     “(I) Investments made after the Closing Date in
Persons, including Subsidiaries, principally engaged in
similar lines of business to that of Borrower or Borrower’s
existing Restricted Subsidiaries that are Loan Parties as of
the Closing Date (including the packaging or product
integrity business) not to exceed the sum of (1) $10,000,000
plus (2) the aggregate net cash proceeds from the issuance
of capital stock or other equity securities of Borrower
after the Closing Date which are contributed as additional
paid-in capital to Borrower and are at all times prior to
the making of any such Investment held by Borrower in a
segregated account and not co-mingled with any other funds
of Borrower or its Subsidiaries (less all of such net cash
proceeds used or otherwise segregated to repurchase Senior
Notes or capital stock or other equity securities of
Borrower or applied for other purposes) in aggregate amount
at any one time outstanding (measured by the fair market
value of such Investment as of the date made); provided,
that no such Investment shall be made following the Second
Amendment Date unless Fixed Charge Coverage exceeds 1.20 to
1.00 as of the most recently ended fiscal quarter for which
information is then available; and”



 









 





     Section 3.5(A) of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:




     “(A) During the period from the Second Amendment Date
to the last day of the first Loan Year, Borrower may redeem
 shares of its capital stock with proceeds received by
Borrower from its issuance of the Senior Notes in an
aggregate amount not exceeding $2,500,000 which are at all
times prior to any such repurchase or redemption held by
Borrower in a segregated account and not co-mingled with any
other funds of Borrower or its Subsidiaries so long as:




     (i) Agent shall have received the financial
information set forth in subsection 4.5(A) for the
fiscal quarter ending November 30, 2004;




     (ii) no Default or Event of Default is then in
existence or would be created as a result thereof; and




     (iii) after giving effect to such repurchase or
redemption, Availability is not less than
$10,000,000.”



     Section 4.2 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




     “4.2 Fixed Charge Coverage. Borrower shall not permit the
Fixed Charge Coverage for any twelve (12) month period ending on
the last day of each fiscal quarter set forth below to be less than
the ratio set forth below for such period.



	 	 	 	 	 
	Date
	 	Ratio

	August 31, 2004
	 	 	0.95 to 1.00	 
	November 30, 2004
	 	 	0.89 to 1.00	 
	February 28, 2005
	 	 	0.75 to 1.00	 
	May 31, 2005
	 	 	0.75 to 1.00	 
	August 31, 2005
	 	 	0.86 to 1.00	 
	November 30, 2005
	 	 	1.05 to 1.00	 
	February 28, 2006 and the last day of each fiscal quarter
thereafter
	 	 	1.10 to 1.00	 







     Section 4.3 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




     “4.3 Unfinanced Capital Expenditure Limits. Borrower
and its Restricted Subsidiaries on a Consolidated basis
shall not make Capital Expenditures during any fiscal year,
commencing with the 2005 fiscal year, that exceed
$13,500,000 in the aggregate for such fiscal year (the
“CapEx Limit”); provided that Borrower and its Restricted
Subsidiaries may make Unfinanced Capital Expenditures during
any fiscal year in excess of the CapEx Limit (but in no
event in excess of $16,000,000 in the aggregate for such
fiscal year) so long as, as of the date such Unfinanced
Capital Expenditures are made, Fixed Charge Coverage as of
the most recently ended fiscal quarter for which information
is then available exceeds 1.10 to 1.00, calculated on a pro
forma basis after giving effect to such Unfinanced Capital
Expenditures and all other Unfinanced Capital Expenditures
made by Borrower and its Restricted Subsidiaries following
the last day of such fiscal quarter.”



     Section 4.4 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:




     “4.4 Maintenance of Minimum Availability. Borrower
shall maintain an aggregate Availability of at least (a)
$3,000,000 at all times other than during a Fixed Asset Draw
Period or a Minimum Fixed Charge Coverage Period and (b)
$5,000,000 at all times during a Fixed Asset Draw Period or
a Minimum Fixed Charge Coverage Period.”



 









 





     Each of the following definitions set forth in Section 10.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:




     “EBITDA“ means, for any period, the sum (without
duplication) of the following for Borrower and its
Restricted Subsidiaries on a Consolidated basis: (a) Net
Income for the period, (b) any provision for (or less any
benefit from) income and franchise taxes included in the
determination of Net Income, (c) interest expense deducted
in the determination of Net Income, (d) amortization and
depreciation deducted in determining Net Income, (e) losses
(or less gains) from Asset Dispositions or other non-cash
items included in the determination of Net Income (excluding
sales, expenses or losses related to current assets), (f)
extraordinary losses (or less gains), as defined under GAAP,
net of related tax effects, included in the determination of
Net Income, (g) non-recurring restructuring charges approved
by Requisite Lenders, including (i) for Borrower’s 2004
fiscal year, severance and relocation costs not exceeding
$5,151,000 in the aggregate incurred in connection with (A)
relocating operations from Borrower’s facilities in
California to its facility in Tolleson, Arizona, (B)
relocating operations from Borrower’s South Carolina
facility to its facilities in Kingsport, Tennessee and
elsewhere, (C) restructuring the operations of Tech
Industries and (D) additional reductions in Borrower’s
overall employee headcount, and (ii) in addition to the
severance and relocation costs specified in the preceding
clause (i), for Borrower’s 2004 and 2005 fiscal years,
severance costs not exceeding $1,200,000 in the aggregate
incurred in connection with reductions in Borrower’s overall
employee headcount, in each case to the extent such charges
are deducted in determining Net Income for such period, (h)
non-recurring charges not exceeding $1,867,000 incurred by
Borrower in fiscal year 2004 in connection with the
repurchase of the Chase Warrant and the Heller Warrant with
proceeds received by Borrower from its issuance of the
Senior Notes to the extent such charges are deducted in
determining Net Income for such period and (i) a one-time
non-recurring non-cash charge not exceeding $1,200,000
incurred by Borrower in fiscal year 2004 in connection with
the write-down of the book value of the Sumter Property to
the extent such charge is deducted in determining Net Income
for such period. To the extent EBITDA is being calculated
for any period which includes any of the following months,
EBITDA for such months shall be deemed to be as follows:
January 2003, $2,501,000; February 2003, $3,048,000; March
2003, $2,910,000; April 2003, $3,147,000; May 2003,
$4,587,000; June 2003, $4,277,000; July 2003, $3,571,000;
August 2003, $5,348,000; September 2003, $2,928,000; October
2003, $2,201,000; and November 2003, $2,770,000.




     “Operating Cash Flow” means, for any period (a) EBITDA
for such period, less (b) Unfinanced Capital Expenditures
for such period, excluding Unfinanced Capital Expenditures
made during Fiscal Years 2004 and 2005 in connection with
projects undertaken by any of the Mexican Restricted
Subsidiary, Portola GmbH or Portola s.r.o. or with Greiner
AG or its affiliates (in an aggregate amount not to exceed
$4,000,000 during fiscal year 2004 and $2,700,000 during
Fiscal Year 2005), less (c) all Investments made in cash by
Borrower or any of its Restricted Subsidiaries during such
period (other than Investments made in Borrower by a
Restricted Subsidiary of Borrower), less (d) Other
Capitalized Costs, excluding Other Capitalized Costs with
respect to Borrower’s acquisition of Tech Industries and
Borrower’s acquisition of Berry Plastics’ dairy cap product
line in March 2004. “Other Capitalized Costs,” means the
gross amount capitalized, for such period, as long term
assets (net of cash received in respect of long term
assets), other than (i) Capital Expenditures and (ii) fees
and expenses capitalized with respect to the Related
Transactions or the transactions under the Existing Credit
Agreement.




     “Unfinanced Capital Expenditures” means, for any period
(a) Capital Expenditures for such period, less (b) the
portion of such Capital Expenditures financed (i) under
capital leases or other Indebtedness (Indebtedness, for this
purpose, does not include drawings under the Revolving Loan)
or (ii) with Net Proceeds of the sale of the Chino Property,
the Sumter Property and the Faulstich Property so long as
such sale complies with the requirements of Sections
3.7(b)(ii), (iii), (iv) and (v) of the Credit Agreement,
less (c) Capital Expenditures not exceeding $3,269,000 with
respect to Borrower’s acquisition of Berry Plastics’ dairy
cap product line in March 2004.



 









 





     Section 10.1 of the Credit Agreement is further amended by adding each of
the following definitions in their proper alphabetical order:




     “Minimum Fixed Charge Coverage Period” means any period
during which Fixed Charge Coverage as of the last day of the
most recent fiscal quarter for which information is then
available is less than or equal to 1.10 to 1.00.




     “Second Amendment Date” means November 24, 2004.



     Schedule 1.2 to the Credit Agreement is hereby amended and restated in its
entirety to read as set forth in Schedule 1.2 attached hereto.



     Exhibit 4.5(C) to the Credit Agreement is hereby amended and restated in
its entirety to read as set forth in Exhibit 4.5(C) attached hereto.



     Conditions. The effectiveness of this Agreement is subject to Borrower’s
satisfaction of the following conditions on or before the date hereof in a
manner satisfactory to the Agent:



     Executed Agreement. Executed signature pages for this Agreement signed by
Agent, Lenders and Borrower shall have been delivered to the Agent.



     Continuation of Representations and Warranties. After giving effect to
the replacement Schedules delivered herewith, the representations and
warranties made by the Loan Parties contained in the Credit Agreement and the
other Loan Documents shall be true and correct in all material respects on and
as of the date hereto with the same effect as if made on and as of the date
hereof (except to the extent such representations and warranties expressly
relate to an earlier date).



     No Existing Default. As of the date hereof and after giving effect to
this Agreement, no Default or Event of Default shall have occurred and be
continuing or shall result from the consummation of the transactions
contemplated hereunder.



     Amendment Fee. The Borrower shall have paid to Agent an amendment fee
equal to $75,000.



     Repayment of Revolving Loans. Borrower shall have applied at least
$5,400,000 of the proceeds received by Borrower from its issuance of the Senior
Notes against the outstanding balance of the Revolving Loans.



     Representations and Warranties of Borrower. Borrower represents and
warrants that:



          (i) the execution, delivery and performance by the Borrower of this
Agreement have been duly authorized by all necessary corporate action and this
Agreement is a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms;



          (ii) each of the representations and warranties contained in the Credit
Agreement is true and correct in all material respects on and as of the date
hereof as if made on the date hereof, except to the extent that such
representations and warranties expressly relate to an earlier date; and



          (iii) neither the execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated hereby does or shall
contravene, result in a breach of, or violate (i) any provision of any Loan
Party’s certificate or articles of incorporation or bylaws, (ii) any law or
regulation, or any order or decree of any court or government instrumentality,
or (iii) any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which any Loan Party or any of its Subsidiaries is a party or by
which any Loan Party or any of its Subsidiaries or any of their property is
bound.



 









 





     Reference To And Effect Upon The Credit Agreement.



          (i) Except as specifically provided herein, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.



          (ii) The execution, delivery and effectiveness of this Agreement shall
not operate as a waiver of any right, power or remedy of Agent or any Lender
under the Credit Agreement or any Loan Document, nor constitute a waiver of
any provision of the Credit Agreement or any Loan Document, except as
specifically set forth herein.



          (iii) This Agreement shall be deemed to be a Loan Document.



     Costs And Expenses. Borrower agrees to reimburse Agent on the date hereof
for all fees, costs and expenses, including the fees, costs and expenses of
counsel or other advisors for advice, assistance, or other representation in
connection with this Agreement.



     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS)
OF THE STATE OF ILLINOIS.



     Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purposes.



     Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original, but
all such counterparts shall constitute one and the same instrument.



[Signature Page Follows]




 









 







IN WITNESS WHEREOF, the parties hereto hereupon set their hands as of the date
first written above.



	 	 	 	 	 
	 	PORTOLA PACKAGING, INC.

 	 
	 	By:  	/s/ Michael T.
Morefield

	 
	 	Title: Senior Vice President and Chief Financial Officer 	 
	 	 	 	 
	 




[Signature Page to Limited Waiver and Second Amendment]




 









 








	 	 	 	 	 
	 	GENERAL ELECTRIC CAPITAL CORPORATION, as
 Agent, Issuing Lender and Lender

 	 
	 	By:  	/s/ Woodrow
Broaders

	 
	 	Title: Authorized Signatory 	 
	 	 	 	 
	 



[Signature Page to Limited Waiver and Second Amendment]




 









 








CONSENT AND REAFFIRMATION (SUBSIDIARY GUARANTORS)



Each of the undersigned hereby (i) acknowledges receipt of a copy of the
foregoing Waiver and Fourth Amendment to Credit Agreement; (ii) consents to
Borrower’s execution and delivery thereof; (iii) affirms that nothing contained
therein shall modify in any respect whatsoever its guaranty of the obligations
of Borrower to Agent and Lenders and reaffirms that such guaranty is and shall
continue to remain in full force and effect and that each Loan Document to
which it is a party or otherwise bound and all Collateral encumbered thereby
will continue to guaranty or secure, as the case may be, to the fullest extent
possible, the payment and performance of all obligations under or in respect of
such guaranty and such other Loan Documents; and (iv) confirms that, as of the
date hereof, it does not have, and hereby waives, remises and releases any
claims or causes of action of any kind against Agent or any of the Lenders or
any of their officers, directors, employees, agents, attorneys, or any of the
Lenders or any of their officers, directors, employees, agents, attorneys or
representatives, or against any of their respective predecessors, successors,
or assigns relating in any way to any event, circumstance, action, or omission
relative to any of the Loan Documents or any transaction contemplated thereby,
from the beginning of time through the date hereof. Although each of the
undersigned has been informed of the matters set forth herein and has
acknowledged and consented to same, each of the undersigned understands that
Agent and Lenders have no obligation to inform it of such matters in the future
or to seek its acknowledgment or consent to future Agreements or waivers, and
nothing herein shall create such a duty.




[Signature Page Follows]




 









 







IN WITNESS WHEREOF, the undersigned have executed this Limited Waiver and
Second Amendment on and as of the date of such Agreement.



	 	 	 	 	 
	 	PORTOLA PACKAGING LTD.

 	 
	 	By:  	/s/ James A. Taylor
	 
	 	Name:  	James A. Taylor 	 
	 	Title:  	Chief Operating Officer 	 



	 	 	 	 	 
	 	PORTOLA PACKAGING CANADA LTD.

 	 
	 	By:  	/s/ Michael T. Morefield
	 
	 	Name:  	Michael T. Morefield 	 
	 	Title:  	Senior VP and Chief Financial Officer 	 



	 	 	 	 	 
	 	PORTOLA ALLIED TOOL, INC.

 	 
	 	By:  	/s/ Michael T. Morefield

	 
	 	Name:  	Michael T. Morefield 	 
	 	Title:  	Senior VP and Chief Financial Officer 	 



	 	 	 	 	 
	 	PORTOLA PACKAGING LIMITED

 	 
	 	By:  	/s/ James A. Taylor

	 
	 	Name:  	James A. Taylor 	 
	 	Title:  	Chief Operating Officer 	 



	 	 	 	 	 
	 	PORTOLA PACKAGING, INC. MEXICO S.A. DE C.V.

 	 
	 	By:  	/s/ James A. Taylor

	 
	 	Name:  	James A. Taylor 	 
	 	Title:  	Chief Operating Officer 	 



	 	 	 	 	 
	 	ATLANTIC PACKAGING SALES LLC

 	 
	 	By:  	/s/ Michael T. Morefield

	 
	 	Name:  	Michael T. Morefield 	 
	 	Title:  	Senior VP and Chief Financial Officer 	 



	 	 	 	 	 
	 	TECH INDUSTRIES, INC.

 	 
	 	By:  	/s/ Michael T. Morefield      

	 
	 	Name:  	Michael T. Morefield 	 
	 	Title:  	Senior VP and Chief Financial Officer 	 



	 	 	 	 	 
	 	PORTOLA LIMITED

 	 
	 	By:  	/s/ Michael T. Morefield

	 
	 	Name:  	Michael T. Morefield 	 
	 	Title:  	Senior VP and Chief Financial Officer 	 






 









 








EXHIBIT A

TO

LIMITED WAIVER AND SECOND AMENDMENT




SPECIFIED DEFAULTS



For purposes of this Agreement, “Specified Defaults” refers to the fact that,
under that certain Post Closing Matters Agreement, dated as of January 23,
2004, between Borrower and Agent, Borrower was required to deliver, but failed
to deliver, to Agent, prior to
        , 2004, executed Bank Agency
Agreements, in form and substance acceptable to Agent, with respect to all
accounts of Borrower and its Restricted Subsidiaries at (i) Canadian Imperial
Bank of Commerce and (ii) Union Bank of California, N.A. Agent acknowledges
that Agent has received fully executed copies of both such Bank Agency
Agreements.



The definition of “Specified Defaults” set forth in this Exhibit A shall be
limited precisely as written and shall not include any other Default or Event
of Default, including, without limitation, any Event of Default arising out of
any other failure by the Borrower to comply with any of the financial covenants
described above.




 









 








SCHEDULE 1.2




PRICING TABLE




	 	 	 	 	 	 	 	 	 
	Average Daily	 	 	 	 
	Availability for	 	 	 	 
	Calculation Period
	 	Index Rate Margin
	 	LIBOR Margin

	£$12,500,000
	 	 	1.25	%	 	 	2.75	%
	>$12,500,000
	 	 	1.00	%	 	 	2.50	%






Notwithstanding the foregoing, from and after the Second
Amendment Date, the LIBOR Margin shall be 2.75% and the Index
Rate Margin shall be 1.25% until such time as Agent shall have
received a Compliance Certificate reflecting Fixed Charge
Coverage as of the last day of any fiscal quarter ending on or
after November 30, 2004 of greater than 1.10 to 1.00.
Commencing on the first Adjustment Date thereafter, the Index
Rate Margin and LIBOR Margin shall be calculated in accordance
with Section 1.2 of the Credit Agreement.




2